This may be a sign of how iPhone demand is faring amongst the competition

The latest iPhone may not be the rockstar Apple thought it would be. The Cupertino, California-based company slashed its orders for iPhone 5 screens by about 50 percent for the first quarter of 2013, and cut orders for other iPhone components as well.

This may be a sign of how iPhone demand is faring amongst the competition. Rival hardware makers like Samsung, whose devices are coupled with Google's Android operating system, have stolen much of the smartphone market share in the U.S.

For Q3 2012, Android was the No. 1 mobile operating system with a market share of 72.4 percent (compared to 52.5 percent in Q3 2011). Apple's iOS followed far behind at 13.9 percent (compared to 15 percent in Q3 2011).

As far as hardware goes, Samsung led the Q3 2012 market share at 22.9 percent (compared to 18.7 percent in Q3 2011) and Apple sat in third place at 5.5 percent (compared to 3.9 percent in Q3 2011).

Apple recently slipped behind in China's smartphone market as well. Apple, which previously held the No. 4 spot in the Chinese mobile phone market, slipped to No. 6 in Q3 2012 due to its low number of shipments, according to research firm IDC. Out of China's 60 million mobile phone shipments in Q3, Apple's iPhone accounted for less than 10 percent.

Apple's iPhone 5 was released in September 2012 with new features like a 4-inch screen and 4G LTE connectivity. It's available in either black or white, and is priced at $199 for the 16GB model, $299 for the 32GB model, and $399 for the 64GB model with two-year contracts.

My guess is, its not that sales are actually hurting, its that Apple expected its growth curve to continue... Which is simply impossible to do for too many years on end. Especially with pretty much every single competitor putting out far better phones at the same price.

This waning demand seems like market saturation is happening. Many iPhone users I know aren't moving to trade in their iPhone 4 or 4S for the iPhone 5 because their current one is still good enough.

Phones are on the fast growth track much like PCs were a number of years ago where each new hardware generation was so much faster than the previous generation there were large gains to be made in performance.

Now, with PCs many people just don't see a need to upgrade their older equipment since the new ones are marginally faster for the things they are used for. I think iPhones are starting to hit that point of marginal returns for newer generations.

but for most die hard Apple fans, it's not about if it's fast enough, it's about having the newest Apple device. I don't own any Apple devices personally, but quite a few friends do, and they have to get the newest every time.

Yup... What we are dealing with is Zeitgeist. In 2007 the iPhone came out and it was easily better than anything else out. It was a market changer... But even 3 years later in 2010 Blackberry was still growing, because of its own Zeitgeist. It was clearly bested in form and function, but still growing it's sales. Remember the term "Crackberry"? It took 4 years for that to wane and the majority of people to realize that Blackberry was years behind iPhone and Android. Now people are starting to realize that the iPhone is behind. It will be able to coast for a few more years, but at some point Apple needs to step it up to catch up with what everyone else is doing.

I would say the point is that there are enough diehard fans out there now that they can release any product and they are pretty much guranteed that many sales all right on release day. That's why they will always have good opening and pre-order numbers but they can't keep up the sale numbers after that.

This is spot on. The only people really worrying about the upgrade treadmill at this point are the people who buy them for image. I've thought about upgrading my wife's iPhone 4, which is eligible, but we just kind of decided "meh, we'll wait for the next one." Like PC's, the upgrade cycle is stretching out.

Is it not entirely possible Apple is simply migrating production to another facility? I think people are reading far to much into this considering: Apple could not even make the iPhone 5 fast enough for market demand and now all of a sudden news arises showing a 50% reduction in demand?

I guess it must be time for a flurry of pre-earnings report rumors (and I won't mention that dreaded phrase - stock manipulation - I promise).

I don't know whether these reports of slashed screen orders are true or not but the one coming from the Nikkei is reporting Apple asked its LCD panel partners to cut orders for iPhone screens in half from 65 million in the March quarter. Looks like a mistake to me, under what circumstances would Apple expect to sell 65 million iPhone screens for a post holiday quarter in 2013? In 2015 maybe but not 2013.

I have no idea what Apple's sales figures will be for this quarter or for next.

I do believe with some high degree of certainty that the sales of iPhones and iPads reported in the next quarterly report, due in less than a couple of weeks, will be significantly bigger than a year ago (even though last year there was an extra week of sales in the holiday quarter).

I do believe with some high degree of certainty that the next holiday quarter at the end of 2013 will be just like this one: Samsung sells the most smartphones. Apple the second most. Apple earns the most profits, Samsung the second most. Both companies will sell more phones next holiday quarter than they do today.

Only two companies have found a way to make substantial profits and grow their sales in the mobile device markets: Samsung and Apple. Every other business, Google, Microsoft, HTC, Nokia, Sony, Facebook, cannot get any financial traction in these new markets.

I think the big story of 2013 will revolve around the changing and dynamic relationship between Apple, Google and Samsung. I expect a more stable if tense relationship between Apple and Google as the latter adjusts to the failure (in terms of Google's business interest) of it's Android strategy. This was signalled by their new seriousness about developing state of the art feature rich apps for iOS, Google has to got to go that way because that's where most of it's revenues in mobile come from, not from Android but from iOS. At the same time Samsung and Google have to deal with the tensions caused by Samsung's crushing of the rest of the Android OEM ecosystem which gives them (from Google's point of view) a dangerous kill switch on the entire Google services presence in Android. One will move first, either Google will use it's Motorola division to seriously compete in the handset market in order to undermine Samsung's ascendancy or Samsung will move first and fork Android to try to grab those service revenues. Prepping for those tricky and demanding moves will take both companies a while yet.

It will interesting to see what is happening to Google's price per click which is one of the core metrics of it's business and which has been declining for the last few quarters. I don't expect any increased transparency in Google's reporting of it's Android business of course, I am sure there will be no figures for Android costs, revenues or profits, neither will they break down mobile income by platform (way too embarrassing) so expect just the usual guff about mobile run rates.